I frequently get asked the question: How can you make a good startup culture when you can’t even describe what a culture is, let alone measure it? Almost all of literature explores the question of, “what is a good person?” and culture is almost as complex a phenomena, so most people don’t try to answer the question or just wave their arms. While anthropologists study and write about human cultures, relatively few people study startup cultures, yet the creation of a “good” startup culture is perhaps the single most important determinant of the long-term success of a founder and his or her startup.
Why care about culture?
Because cultures determine competitiveness and efficiency, particularly in times of crisis, which all startup and founders must weather in order to grow and prosper. A culture (Startup Culture) is the shared understanding of what each person must do and how they should act to help the startup succeed. The more ingrained is the understanding of what everyone needs to do to help their startup succeed, the less supervision is required, the fewer mistakes are made, the less time it takes to make anything happen, and the faster and more confidently everyone can re-align their routines to respond to the inevitable crises.
How do you get everyone to know how they should act under all conditions?
Role models. They say that a picture is worth a thousand words, well, a good role-model is worth a million. Of course, the founder is the role-model supreme, but everyone else that she praises, promotes, or pays attention to is also a role model. And anyone that she reprimands or ignores becomes a negative role-model. As the startup grows, each level of the hierarchy and each group in the organization will have their own roles models. Everyone is constantly consciously and unconsciously surveying everyone they come in contact with to determine how they should act to personally get ahead. And if praise only comes under specific conditions, then everyone will work to recreate those conditions and the culture becomes inflexible. If everyone receiving praise looks and reasons the same, then you get a homogenous, non-inclusive, and uncreative culture.
How do you make everyone a role model?
Tell everyone, individually and as a group, what makes them a role model, in public. If it is not clear who is getting praised, rewarded, or promoted, then people will guess. That is how cultures get diffuse and incoherent, with guessing or people claiming or acting as role models but are not. Not everyone can or should be a role model, that would be confusing. And praising only individuals creates a culture where teamwork is less valued. Praising groups that have worked effectively together for their team behavior creates benchmarks for how people should work together. But praising only groups diminishes individual initiative. The proper balance depends upon the nature of the business; consulting partnership cultures should be different than those found in cost conscious consumer electronics startup. Essentially, leaders need to be in constant dialog with those they lead about what is working, what they are thinking, and what might or will change and why.
How do you measure the efficacy of your culture?
Ask open ended questions about how things really work. While leaders need to say publicly what makes them happy in order to help everyone understand how to be a role-model, they also need to be sensitive to where and how things may be working differently than expected. KPIs, or key performance indicators, never describe how the things they measure actually get accomplished. Open ended questions (not “do you?” or “which?” type questions, but questions that start with “How?” and “What?”) are powerful probes of reality and leaders need direct connections to the real. By asking an open ended question, you show respect and get to listen to what is actually important to the individual. As important, asking open ended questions builds a picture of how and when actions actually happen and how things get done. With this information, and only with this information, do you know if each part of the enterprise is working according to the leader’s vision. This is the ultimate measurement of cultural efficacy. Because listening to people from all different parts of an enterprise becomes very time consuming as it grows, many leaders just assume everything is working unless they hear otherwise, or assume that if the KPIs are good then the culture must be efficient, innovative, and flexible. This naivete inevitably leads to crises when unexpected internal or external shocks occur and chaos ensues and the leader does not know what to do because the individuals and groups did not respond as expected. If the team does not believe the leader knows how to respond to a crisis, then he or she loses the confidence of their team and therefore are no longer considered the leader.
How do keep the culture coherent when the enterprise grows quickly?
Keep it simple. For a culture to remain powerfully supportive to the vision of the leader and enhance the competitive advantage of the enterprise, it must be a vision that is simple and that everyone will feel proud of being a role model for. It must be simple. Sam Walton made sure from the beginning that everyone at Walmart focused on pleasing customers. Jeff Bezos has done the same at Amazon. It is not always about pleasing customers, for Steve Jobs it was all about beautiful easy to use personal electronics, but it can also be about being the lowest cost producer, or making films that win the most Oscars, etc.. But if it gets too complicated, then more and more people can’t understand what they should do to help the startup succeed, slowing them down to deliberate and feeling no longer part of the success story.